StockNews - Landwind & China Hongxing both report profits

Landwind Medical, a recent listing in SGX as well as one of the many China-based companies, is a major distributor and manufacturer of medical imaging equipments. Besides distributing for major brands like Philips and Siemens, it manufactures its series of portable ultrasound scanners. With a huge distribution coverage across China, it has reported that revenues for FY05 increased 29% to RMB247.2million. At the same time, net profit before tax increased 19% to RMB61.0m and net profit after tax in increased by 9% to RMB56.2m. On top of that, its order book as at 31 Jan 2006 stands at RMB85.4m, twice compared to that in the previous year. The order book calculates all completed and invoiced sales.


China Hongxing, another recently listed China play, is one of the larger manufacturer of sports shoes and markets it under its own proprietary brand, Erke. Its main competitors in China includes Anta, Li Ning and not to mention global giants like Adidas and Nike. However with sales being targeted at second tier cities, China Hongxing has reported an increase in turnover by 34.2% to RMB899.6m for FY05. This was accompanied with a surge in net profit to RMB127.5m which is a 44.6% increase from FY04. This increase could be attributed to increase in the number of Erke specialty stores from 1,600 in 2004 to as much as 2,100 by end of 2005, increasing brand visibility and driving sales.

As China gears up for the 2008 Olympics, sales of sports shoes and apparels looks set to increase. Furthermore from the case of Landwind and China Hongxing, we have seen that sales in 2nd tier cities in China have been rising, indicating more affluence of residents in these cities. Landwind's cheaper proprietary products could also look forward to a boost as a result.